Mullaguri Ranga Jyothi V. Income Tax Officer

WP/12342/2024

AI Insights

The case involves two writ petitions filed by Samoath Kumar Sillapurapu against the Income Tax Department, challenging the validity of reassessment orders for the assessment years 2015-16 and 2016-17. The petitioner argued that the reassessment notices and orders were issued in violation of the procedural requirements set by the Finance Act, 2021, and were contrary to the principles of natural justice and barred by limitation. The High Court, referencing a previous decision in W.P.No.25903 of 2022, agreed with the petitioner and quashed the notices and orders, emphasizing the need for adherence to the correct legal procedures in tax reassessments.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752919 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 02-05-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income-tax Act, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B REDDY; VIJHAY PUNNA
• Assessee Lawyers: DUNDU MANMOHAN
• Keywords: Assessment Order; Limitation; Natural Justice; Reassessment Process; Writ of Mandamus
• Section: 147; 148; 144; 151; 144B; 148A(d); 226

Judgement Text

"HIGH COURT FOR THE STA A.T-H YDERA Ji DOF TELA NGANA (bpeclal Original Jurisdiction) iiYS??:IiJii.,.^.,?S|,?,.,f I\".I.TA\" PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL rHE HoNouRA\".. \"A,*r?ar,\"E N.T,KARAMJT F20 [ 3403 ] Pvt gar, WRIT oF2024 PETIT NOS: toN 42& 1256 123 20 24 W.P .NO:1 Between: 2342 ffi [{,ji:*:j#?t6..#ii,;s3t3At.4p.g,?,ix,\"xtJf; ios*o\"iju 1. Income Tax officer , o*D \"'PETlrloNER -, .|31[lvaerrouo a#T$ou(')' Hvderabad' I T Tower, AC cuards, rvrasab ; ?ri[rT;:?rti,Ffi,:frttri#,;jp1,*,fri,,H#,,: . Assessment Centre I Hamp, Jawaharlal Ne ...RESPONDENTS Petition under Arttcle 226 of the Constitution of tndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate wnt order or direction more partrcularly one in the nature of writ of rvrandamus. decraring the Assessment order dt. 26t03/2024 passed by the 3rd respondent u/s 147 r.w.s 144/1448 of the rncome{ax Act for A'y 2015-16 vide DrN No. rrBA,rAST/s r147 12023-24/1063395044( 1), which is passed as a consequence of the order passed u/s 148A(d) dt.27 /o4r2022 vide DtN No. ITBA/AST/F/148 N2022_23t 1042868835(1) and the notice u/s 148 dt.2710412022 vide DtN No |TBA/AST/S t14B 1 t2o22_23t 1042869464(11 , issued by the JAO(1st respondent) instead of FAO(3rd respondent), as void, i{tegat, and contrary to the provisions of rncome-tax Act and contrary to the principres of Natural Justice, apart from being barred by limitation. (:-/ lA NO: I OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be pleased to stay all further proceedings pursuant to the Assessment Order Ct. 26103/2024 passed by the 3rd respondent u/s 147 r'w s 144!144}of the lncome-tax Act for A Y. 2015- 16 vide DIN No. ITBA/AST/S 114712O23-24t1O63395044(1)' and may pass such other orde(s) as the Honourable Court deems fit and proper in the lnterests of substantial justice, as otherwise the Petitioner would be put to irreparable loss and severe iniury. Counsel for the Petitroner: SRI DUNDU MANMOHAN ' counsel for the Responu\"'il'J*I'vTliHai i puurun' sENloR sc FoR lrD Between: Samoath Kumar Siflpurapu' S/o' Raghavarah' Aged about 65 years' Occ: ffii#;; *H rl\" o i ib \"r#nt< cotoni Khammanr - s0/002 ...PETITIONER AND '1 The lncome Tax Officer, Ward-l, Khammam' lnconre Tax Offlce Raleev ' cr\"ni. arrl, Chowk, Near'Kinnerasanl Thealre Khammam'50/001 , Yri\".'ni-,Xlilr'i cti*r c\"ilriliiJn\"i oi rn\"orn\" iax AP and TS 1oth Floor' C- ' Bi;;i ii\"T\"*\"ti. lo-z-: AC Guards, Hvderabad:00004 : iie Asiessment [nit, lncome Tax Departrirent l\"latronal Faceless ' nsieiimtnt c\"ntre, o\"rni rrr,nisiry or'r'nantt Roonr No 401 2nd Floor' E- Ramp,JawaharlalNehrustadium Delhr'110003 ...RES'ONDENTS PetitionunderArticle226oftheConstitutionoflndiaprayingthatinthe circumstances stated in the affidavit filed therewith, the High court may be pleased to issue an appropriate writ order or direction more particularly one in the nature of Writ of Mandamus, declarinq the Assessment Order dt' 11.01.2024passed by the 3rdrespondent uls 147 tw.s144l144B of the Income-tax Act for A.Y. 2016-17 vide DIN No ITBA,/ AST/S 114712023- 2411059630069(1),which is passed as a consequence of the order passed u/s 14sA(d) dt 24 03 2023 vide DIN No ITBNAST|FI148N2022-2311051209402(1) and the norice u/s 148 dt.28.03 2023 vide DIN No rrBA ,ASTTS /148 112022- W.P.NO: 12562 OF 2024 2311051445148(1), issued by the JAo(1st respondent) instead of FAO(3rd respondent), that too contrary to the provrsrons of sec. 14g of the Act. as void. illegal, and contrary to the princtples of Natural Justice, apart from being barred by limitation. lA NO: 1 OF 2024 Petition under section rsl cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings pursuant to the Assessment Order dt. 11.01.2024 passed by the 3rd respondent uts r4l ( w s144t1448 of the rncome{ax Act for A y. 2016- 17 vide DIN No. ITBA,/AST t5fi47 t2023-24/1059630069(1). Counsel for the Petitioner: SRt DUNDU MANMOHAN Counsel for the Respondents: M/s. B.SAPNA REDDY FOR SRI J.V.PRASAD, SC FOR INCOME TAX The Court made the following: COMMON ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRT JUSTICE N. TUKARAMJI WRIT PETITIONNOs.12342 & 12562 0F 2024 COMMON ORDER: (per Hon'bte Justice Sujog paut) Sri Dundu Manmohan, learned counsel appears for the petitioner(s), Sri Vij hay K punna, learned Senior Standing Counsel appears for the respondent(s)-Income Tax Department in W.P.No. 12342 of 2024 and Ms. B. Sapna Reddy, learned counsel representing Sri J.V. prasad, learned Standing Counsel for the respondent(s)-lncome Tax Department in W.p.No.12562 of 2024. 2. Regard being had to the similarity of the question involved, on the joint request o_f the parties, the matters are analogously heard and decided b;, this common order. 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Financ e Act, 2021, re- assessment process stood modified but the respondents have not taken care of it and therefore notices issued under Section 14g of the Income Tax Act, 196 I cannot sustain judicial scrutiny. Since notices are bad in law, the consequential orders are also bad in law. -/ 2 4. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are finally drawn by this Court in a batch of writ petitions, W.P.No.25903 of 2022 and other connected matters, decided by common order dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14.09.2023' 5 This Court in the said order dated 14.09-2023 in W.P.No.25903 of 2022, held as under: \"35. ln view of the aforesaid discussions, it is by now Yery clear that the procedure to be followed by the respondent-Department upon treating the notices issued for reassessment being under Section 'rrl8A, the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as laid down under the Finance Act, 2021. ln the absence of which, we are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Acl, 2021, at the first inslance. Secondly, it is also in direct contravention to the directives issued by the Hon'ble Supreme Court in the case of Ashish Agarwal, supra. 36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Department is neithel tenable, nor suslainable. The notices so issued and lhe procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent Department pursuant to the notices issued under Section 14/ and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles lhat when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically. 37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide 3 the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings. 38- Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Aganaral, supra. 39. No order as to costs.', 6. In view of the consensus arrived, the impugned Show cause notices and consequential orders passed in this batch of writ petitions are set aside. Liberty is reserved to both the parties to take respective stand and to proceed in accordance with law as per paragraph No.3B of the order dated 14.09.2023 in W.P.No.259O3 of 2O22. 7. The writ petitions are allou,ed. No costs. Interlocutory applications, if any pending, shall also stand closed SD/-P. CH. NAGABHUSHAMBA ASSISTAN REGISTRAR //TRUE COPY// SEC N OFFICER To 1 2 3 4 The lncome Tax Officer, Ward-'1, Khammam. lncome Tax Office, Rajeev Gunt, Rajiv Chowk, Near Kinnerasani Theatre. Khammam-507001. Income Tax Officer, Ward 6(1). Hyderabad. I T Tower, AC Guards, Masab Tank, Hyderabad - 500004. The Principal Chief Commissioner of lncome Tax AP and TS, 1Oth Floor, C- Block, l.T. Towers, 10-2-3, A.C. Guards. Hyderabad-500004. The Assessment Unit, Income Tax Department, National Faceless Assessment Cenke, Delhi, Ministry of Finance. Room No. 401,2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi,l 10003 One CC to SRI DUNDU IVIANMOHAN, Advocate IOPUC] One CC to SRI J.V.PRASAD, SC FOR ITD [OPUC] One CC to SRI VIJHAY K PUNNA, SENIOR SC FOR ITD IOPUC] Two CD Copies t 6 7 8 PSK. I,S (r HIGH COURT DATED:0210512024 COMMON ORDER WP.Nos.12342 & 12562 of 2024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS. .t YA Y 1 uE STA r (' 1 3 0E[ 2li2{ ,t J () ( I c l' + a, )ur 'l b Co.(^!)' l1- o "